Financial education is the foundation for successful employee participation programs
Employee participation programs (EPP) can quickly become complex. Every program is different, as is the understanding of the EPP’s benefits, and the resulting expectations, goals, and options.
Organizations must establish a common understanding of the EPP through authentic internal communication, and the provision of basic financial knowledge.
Three reasons to promote financial education
Organizations offer Employee Participation Programs as a voluntary, additional benefit to enable employees to share in the company’s success. These monetary benefits are part of the Total Rewards System. As with other benefits, the added value for employees only becomes apparent when they are used—and this is a voluntary step, with no influence on the working relationship.
For this reason, it is critical that EPPs have a clear value proposition, a good story, and an attention-grabbing campaign that stands out from the noise of daily internal communication. Professional design that attracts attention and interest in the EPP must be accompanied by persuasive and informative content.
1. Informed employees = appreciative employees
Employee Participation Programs range from stock option plans, employee stock purchase plans, share-matching plans, and profit sharing programs. Depending on the model, employees benefit from a share of the company profit, or increases in the organization’s value or dividends—but each model also has risks. Without basic financial knowledge, the opportunities and risks of the EPP remain abstract for many employees. Research has shown that financial competence follows an inverted U-shape with the lowest levels amongs the youngest and oldest demographic groups, and the peak occurring in the middle age demographic.
The development of a persuasive financial education program is based on existing information about the target groups and their current financial competence. Segmented communication and interactive learning formats help address diverse knowledge levels. Employees can only appreciate the advantages of an EPP when the program is clearly explained, and tailored to the target audience. It should be noted that not everyone has to take part, but every employee should have the opportunity to understand the advantages of the EPP, and recognize the added value of the knowledge gained (as part of the employee experience). All this strengthens the employer brand, and leads to increased employee satisfaction and motivation.
Tips for better communication
- Analyse the program requirements and determine the level of financial knowledge needed
Tip:Use focus groups and moderated discussion formats - Create a glossary with definitions of key terminology
Tip:Use simple language that is easy to translate, and avoid technical terms - Compile a list of the key questions that participants might have before joining the program
Tip:Display the answers in text and visual formats, using interactive media - Develop interactive educational content for different knowledge levels
Tip:Integrate content into your Learning Management System (LMS), use synergies, and create financial education content that goes beyond EPP communication - Develop entertaining knowledge tests
Tip:Use gamification for playful learning
- Develop a segmented communications strategy
Tip:Consider the current needs of each target group, their knowledge level, and the organization situation. Localize communication - Train communicators and multipliers
Tip:Offer recurring training opportunities, and provide communication toolkits to participants - Regularly encourage employees to test and develop their basic financial competence
Tip:Coordinate with your internal corporate communications department - Provide the entire target audience with the opportunity to take part in the EPP: Announce, inform, and educate
Tip:Plan your campaign backward from the participation deadline
2. Financial education for a stronger future
By understanding the mechanisms of the EPP, we also start to question other remuneration elements, such as company pension schemes, and we recognize the connections within the total rewards package. In addition, it is expected that employees will receive more information about their compensation components due to the upcoming pay transparency regulations. It is beneficial for them to be able to understand and evaluate this information.
Financial education promotes long-term financial responsibility and self-determination. In contrast, worrying about your financial situation can put strain on your health and reduce motivation. Research has shown that financial wellbeing reduces absenteeism and increases employer attractiveness.
Financial literacy is a combination of awareness, knowledge, skills, and attitude and behaviour, and is necessary for making robust financial decisions, and ultimately for achieving financial .
3. Shared knowledge promotes team spirit
Employee Participation Programs can be a unifying factor within a company—provided everyone understands the rules. Financial education for all promotes equality, helps employees understand corporate structures and financial indicators, and strengthens the shared focus on the organization’s goals.
Summary
Employee Participation Programs are more than just a financial benefit. They are tools that strengthen the corporate culture, increase employee loyalty, and boost productivity. Their greatest leverage is achieved when companies invest directly in the financial education of their employees, as knowledge is the foundation for informed decision-making—and for sustainable company success.*
*This article was published (in German) in the Unternehmer magazine special edition Employee Participation, June 2025, by Going Public Media AG.
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